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Continuing delays involving the Muskrat Falls project are now spreading beyond this province.
Last Wednesday, the Nova Scotia Utility and Review Board (UARB) released a decision that will see Nova Scotia ratepayers pay costs for the Maritime Link this year, even though it’s not supplying power yet.
And the costs aren’t inconsequential: $20.6 million in operating and maintenance charges, $44.5 million in debt financing costs, and $50 million in equity financing costs.
If that’s not enough, the builders of the link are looking for $28.6 million more to satisfy the terms of the federal loan guarantee.
At the same time, in the absence of power from Labrador, Nova Scotia Power is paying for fuel to generate the power it needs instead.
The UARB says in the decision that it’s getting concerned: “Nova Scotia Power Maritime Link (NSPML) has continued confidence that the projected NS Block delivery date of June 1, 2020 will be met. However, the Board is concerned that there are still significant risks remaining that could affect the expected delivery date. The Board recognizes that these risks are primarily the responsibility of Nalcor and not NSPML. However, if these risks result in any further delay of delivery of the NS Block (of power), NS Power ratepayers will be impacted.”
Two Saturdays ago, I wrote about new equipment problems with the Labrador Island Link identified by a consultant to this province’s Public Utilities Board.
Turns out, NSPML had also pointed out the issues to the UARB, with the board writing: “Specifically, one of these risks relates to commissioning of the AC transmission synchronous condensers on the island of Newfoundland. NSPML indicated that these assets are physically complete, but they have yet to be commissioned as a result of several operational issues encountered during the commissioning process.”
Here’s Emera’s chief operating officer for electrical utilities, Richard Janega, testifying about the condensers at a board hearing in October: “(It) would definitely be a concern if they ran into a problem that took them another year and a half to complete. But I don’t expect that to be the case. They’re assembled. They have tested one of the units and as I said, the three items that they’re encountering they’ve identified solutions for those. So, it’s just a matter, hopefully, of the physical completion of that work.”
There are interesting days ahead.
And when it comes to the other elephant in the room — GE Grid Solutions’ inability to develop working protection and control software with the Labrador Island Link (the line that’s supposed to bring power to the Avalon from Labrador) — Janega admits the problem’s not small.
“This is taking a long time. (GE is) years behind schedule for completing the controls, which escalates our concern level and Nalcor’s. But we are confident that (Nalcor is) taking commercially reasonable steps to work with General Electric and creating terms that will promote GE wanting to get the work finished as soon as possible.”
Oh, and one other scrap of Muskrat news.
This province’s PUB has taken additional action on the Liberty Consulting report that outlined new delays with the project. The PUB has ordered Newfoundland and Labrador Hydro to “immediately advise” the PUB “of any future changes to this schedule, the reason for the change and the implications of any delay for delivery of power and energy to the Island Integrated System over the LIL,” along with plans for addressing a number of problems highlighted in the Liberty report.
The board is particular interested in the problem with the synchronous condensers, writing, “the Board requires that Hydro provide a report by December 13, 2019 on these two issues related to the synchronous condensers that fully describes the problems, the status of the investigation into the root causes and the plan and schedule to address the issues.”
There are interesting days ahead.
Russell Wangersky’s column appears in SaltWire publications across Atlantic Canada. He can be reached at firstname.lastname@example.org — Twitter: @wangersky